Chinese Yuan May Rise More Than Expected: Strategist

The Chinese yuan is likely to appreciate more than most people expect, Jim Rickards, senior managing director for market intelligence at Omnis, a consulting firm, told CNBC Wednesday.

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Bank of China

"It won’t go up to the 20 percent (Sen. Chuck) Schumer (D-NY) wants, but it’ll go up a lot more than that,"Rickards said."They are really separating themselves from the Fed’s zero interest rate policy; they have to raise rates."

The Chinese yuan had a de facto peg since 2008, but in June the People's Bank of China (PBOC) allowed the currency more flexibility to trade with the market. Schumer has been seeking more flexibility in China's currency policy, charging Beijing's policy with undervaluing the currency.

While the U.S. has welcomed more currency flexibilty, Rickards warns U.S. businesses dealing with Chinaneed to understand the economy is influenced by the Chinese communist party.

"Whenever you are doing business in China, you don’t just look at the spread sheets, or returns," Rickards said.

Businesses also need to consider the role of communist party ideology in any business decision.